By Andrew Starke
Australian Leisure and Entertainment Property Group (ALE) has completed the sales of three Melbourne pubs for $16.055 million following the sale of two of its Sydney properties earlier this month.
ALE sold the Elsternwick Hotel for $6.225 million, Rose, Shamrock and Thistle Hotel for $4.81 million and the Rifle Club Hotel for $5.02 million.
All three establishments were bought by private investors and are leased to operator Australian Leisure and Hospitality (ALH) for 19 years, with the option to extend the leases thereafter.
ALE managing director Andrew Wilkinson said the sales, together with last week’s Sydney sales, demonstrated that there continues to be a very strong demand for high quality and affordable hotel assets in an otherwise difficult market.
"ALE has consistently highlighted both the quality of the tenant ALH and the long term CPI linked leases over what are well established and profitable hotels,” he said. “The strong sale results over the last two weeks clearly support our long held belief that quality properties will continue to be attractive to investors through all stages of the cycle.”
Wilkinson added that he was pleased with the strong capitalisation rate achieved at the Melbourne auction and the interest shown by potential buyers.
ALE has sold five properties over the past two weeks for a combined total of $27.795 million. On average, these have sold at a 60 per cent increase on the cost price of what they were acquired for in November 2003.
ALE shares were trading at $2.44 at 11:00am today (Jun 26), compared to $2.43 seven days ago.